Diamond News

Gold was a little choppy last night, trading either side of unchanged in a modest range of $1294 - $1300. It rose to its $1300 high during early European time, buoyed by softness in the dollar (DX from 93.90 – 93.63).

The greenback was pressured by hawkish comments from the ECB’s Praet that the Bank would debate ending bond buys next week, which took the euro up from $1.1715 - $1.1765.

However, a lack of follow-through buying and some shorts selling into strength knocked gold quickly back to its $1294 low.

Later during the European session, better than expected readings on German Construction PMI and Eurozone Retail PMI lifted the common currency to $1.1779, and took the DX down to 93.56.

Gold rebounded, but only managed to claw back to $1297. A move up in global bond yields (US 10-year bond (2.915% to 2.964%, German Bund 0.39% - 0.45%, UK Gilts 1.31% - 1.35%) in response to Praet’s comments was a headwind for gold, as were firmer global stocks.

The NIKKEI rose 0.4%, the SCI was flat, European shares were up from 0.3% to 0.4%, and S&P futures were +0.2%. A slight dip in oil (WTI from $65.50 - $65.03, API showed surprise large build in US gasoline inventories), weighed on stocks.

At 8:30 AM, a weaker report on US Productivity (0.4% vs. exp. 0.7%) outweighed a slightly better than expected report on Unit Labor Costs (2.9% vs. exp. 2.8%), and a smaller Trade Gap (-$46.2B vs. exp. -$49.1B).

S&P futures dipped to 2753, and the 10-year bond yield ticked down to 2.948%.

The DX fell to 93.42, pressured also by continued strength in the euro ($1.1795) and pushed gold higher.

The yellow metal took out the overnight high...

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